INTL CORP BANK (NOW

UNION BANK) VS. SPS.

FRANCIS S. GUECO AND
MA. LUZ GUECO
Ponente: Kapunan
FACTS:
-Resps. Gueco sps. Obtained loan
from petitioner to purchase a car.
In consideration, sps. Executed
promissory notes payable in
monthly installments and chattel
mortgage over the car as security
for the notes.
-sps. Defaulted in payment
-bank filed civil action for sum of
money w/ prayer for a writ of
replevin before MTC Pasay
-sheriff fectched resp. Dr. Gueco for
a meeting
-amount agreed to be lowered to
154K.Car detained w/ the bank.
-On Aug. 28, Dr. Gueco went to the
bank and negotiated that amount
be at 150K.
-the next day, the managers check
was given but the car was not
released because of his refusal to
sign the joint motion to dismiss.
-Gueco sps.: Dr. Gueco need not
sign the motion for joint dismissal
considering that they had not yet
filed their answer.
-Bank: Joint motion to dismiss is
SOP of the bank to effect a
compromise and preclude future

filing of claims, counterclaims/ suits

for damages
-sps. Demand letters and meetings,
civil action for damages between
MTC QC
MTC: DISMISSED CASE FOR LACK
OF MERIT
Appeal to RTC, DECISION
REVERSED.
-there was meeting of the minds
bet. Parties as to the reduction of
the amount of indebtedness and
the release of car but said
agreement did not include the
signing of the Joint motion to
dismiss as a CONDITION SINE QUA
NON for effectivity of compromise.
Court ordered bank to: 1)return the
car, appellee to deposit mgrs
check 2) pay appellants sum of 50K
damages, etc. pay suit
CA: -DENIED PET. FOR REVIEW ON
CERTIORARI
- Relied on the respect
accorded to the finality of
findings by the lower court on
the existence of fraud.
ISSUES:
W/N CA erred in holding that
there was no agreement w/
respect to the execution of
the joint motion to dismiss as
a condition for the
compromise agreement
W/N CA erred in granting
moral and exemplary
damages and attys fees in
favor of resps.

W/N CA erred in holding that

petitioner return the car w/o
any provision for the
issuance of ne mgrs check
by resps in favor of the
petitioner in lieu of original
cashiers check that has
already become stale.
RULING:
Decision of CA set aside.
-No fraud on the act of the bank
-Joint motion to dismiss was but
a normal consequence of the
compromise agreement
-in cases of breach of contract,
moral damages may only be
awarded when the breach was
attended by fraud or bad faith
-bank lowered debt of Dr. Gueco
from 184 K to 150K is indicative
of Good faith and sincere desire
to settle the case
Managers check: Bill of
exchange drawn by the cashier
of the bank itself and accepted
in advance by the act of its
issuance.
-if the check becomes stale, it
becomes imperative that the
circumstances that caused its
non-presentment be
determined.

PNB VS AMELIO
TRIA AND JOHN
DOE
Ponente: Velasco

FACTS:
Respondent Tria was a former
Branch Manager of petitioner
assigned at PNBs Metropolitan
Waterworks and Sewerage
System Branch (PNB-MWSS)
located within the (MWSS)
-Sept 21, 2001, MWSS opened
Current Account (C/A) No. 244850099-6 with PNB-MWSS and
made an initial deposit of PhP
6,714,621.13 on October 10,
2001. Account is for depository
for a loan from the ADB) to fund
Contract No. MS-O1C.
-PNB checks must be issued and
three signatures securedone
signatory each from MWSS,
Maynilad Water Services, Inc.
(MWSI), and the contractor,
China-Geo Engineering
Corporation
-C/A 244-850099-6 became
dormant with a balance of PhP
5,397,154.07
-Tria requested a listing of the
dormant accounts of PNB-MWSS
and borrowed the folders of
MWSS and C/A 244-850099-6
-April 22, 2004, PNB-MWSS
received a letter-request from
MWSS instructing the deduction
of PhP 5,200,000 (plus charges)
from C/A 244-850099-6 and the
issuance of the corresponding
managers check in the same
amount payable to a certain
Atty. Rodrigo A. Reyes.

-C/A 244-850099-6 was reactivated in light of the letterrequest.

- PNB-MWSS received cash
delivery from PNBs Cash Center in
the amount of PhP 8,660,000.
-

Tria accompanied Atty.

Reyes in presenting Managers
Check No. 1165848 to PNBs
Quezon City Circle Branch (PNBCircle) for encashment and told
PNB-Circles SSO, Flandez, that PNBMWSS had no available cash to pay
the amount indicated in the
Managers Check.
To confirm the issuance of
Managers Check No. 1165848,
Flandez called PNB-MWSS and
talked to its Sales and Service
Head,
Veniegas.
Veniegas
confirmed that PNB-MWSS issued a
managers check in favor of Atty.
Reyes
and
sent
a
letterconfirmation through e-mail to
PNB-Circle
-Upon receiving confirmation
from PNB-MWSS regarding the
managers check, Flandez went
to the Cash Center of PNB-Circle
to pick up the cash requisition.
-Tria and Atty. Reyes, however,
followed him with Tria telling
Flandez: Pirmahan ko na lang
tong check, George. Identify ko
na lang siya kasi nagmamadali

siya. Dito na lang i-receive. For

security kasi nag-iisa lang siya.
-In August 2004, Veniegas, the
Sales and Service Head of PNBMWSS, observed that Tria
showed sudden concern with
the Minutes of the Meeting
dated August 6, 2004 even if he
was no longer involved in the
operations of the bank. Tria
reminded her to prepare the
Minutes of the Meeting. Tria then
made revisions therein
-On November 1, 2004, Tria
retired as PNB-MWSS Manager
-Veniegas verified that PhP
5,200,000 was indeed debited
and was encashed using
Managers Check No. 1165848 in
favor of Atty. Rodrigo A. Reyes.
-Veniegas also attempted to
retrieve the files for the
transaction on April 22, 2004
but discovered that the
duplicate copy of Managers
Check No. 1165848, the
managers check application
form and the letter of authority
were all missing
-Pulida (employee of MWSS)
notified Veniegas that MWSS did
not apply for the issuance of the
managers check payable to Atty.
Reyes. Upon verification with
the Integrated Bar of

the Philippines, it was

discovered that there was no
Rodrigo A. Reyes included in its
membership roster. Further,
upon inspection of the PNBMWSS microfilm copy of
Managers Check No. 1165848, it
was shown that the check was
negotiated and encashed at the
PNB-Circle on April 26, 2004 and
was annotated with ok for
payment per confirmation and
approval of PNB MWSS by Tria
on the dorsal portion of the
check
-February 14, 2005, MWSS wrote
the new Branch Manager of
PNB-MWSS, Ofelia Daway, about
the unauthorized withdrawal
from their PNB C/A No. 244850099-6.MWSS expressed
surprise at the withdrawal of
PhP 5,200,030 from its account
when it had not issued any PNB
checks.
-PNB conducted its own
investigation and, at its
conclusion, sought to hold
Tria liable for qualified theft
TRIAS DEFENSE: Tria, via his
Counter-Affidavit, contended
that
(1) there was no taking of personal
property; (2) there was no intent to
gain on his part; (3) the personal
property does not belong to PNB
even if it is the depositary bank; (4)
there was no grave abuse of

confidence on his part; and (5) his

alleged identification of the payee
is not the operative act that
triggered the payment of the
managers check by the PNB-MWSS
Branch. Instead, Tria argued that
it was Flandez who approved
and paid the managers check
even beyond his authority. He
added that it was the other
bank employees who should be
held liable for the loss.

UPON preliminary investigation,

the Assistant City Prosecutor:
-dismissal of the charge for
Qualified Theft against
respondent Amelio C. Tria due to
lack of evidence and
probable cause.
PNB moved for reconsideration
but was denied
PNB filed a petition for
review with the Department
of Justice (DOJ) and prayed
for the reversal
Justice Secretary Raul M.
Gonzales issued a Resolution
dismissing PNBs petition for
review. PNBs motion for
reconsideration was denied
CA:
-Issues before the CA:

both the OCP and the DOJ

committed grave abuse of
discretion in failing to consider
that Tria and Atty. Reyes/John
Doe conspired in committing the
crime of qualified theft;
and the DOJ committed grave
abuse of discretion in failing to
consider the existence of
probable cause in the instant
case and affirming the OCPs
findings that there is no
probable cause to hold Tria and
Atty. Reyes/John Doe for trial in
the crime of qualified theft.
CA RULING: CA decided in favor of
Tria. In affirming the DOJ Resolution
issued by Secretary Gonzales, the
CA took notice of how Managers
Check No. 1165848 was issued and
paid by PNB after the verification
made by PNBs own employees.
The CA ruled that probable cause
against Tria and Atty. Reyes was
not
established
since
the
employees of PNB made the
encashment
after
their
own
independent verification of C/A No.
244-850099-6. Further,
the
CA
deferred to the DOJs determination
of probable cause for the filing of
an information in court as it is an
executive function and ruled that
the resolutions were not reversible
as PNB was unable to show that

these resolutions of the DOJ were

tainted with grave abuse of
discretion.
SC:
-CA in the instant case
erroneously overlooked vital
factual circumstances that call
for a reversal of its ruling
-And indeed, grave abuse of
discretion attended the decision
to drop the charges against Tria
as there was more than
probable cause to proceed
against him for qualified theft
-the acts of Tria and the relevant
circumstances that led to the
encashment of the check
provide more than sufficient
basis for the finding of probable
cause to file an information
against him and John Doe/Atty.
Reyes for qualified theft. In fact,
it is easy to infer from the
factual milieu of the instant case
the existence of all the elements
necessary for the prosecution of
the crime of qualified theft.
-It is the existence of the fourth
element, the taking be done
without the owners consent
that is the crux of contention.
While the appellate court,
together with the DOJ and OCP,
maintains the negative and
equates the cumulative acts of
the other PNB employees as the

consent of PNB in the issuance

and encashment of the
managers check, this Court
cannot find itself to sustain such
opinion.
-ria, it must be reiterated, was
PNBs bank manager for its
MWSS branch. The check in
question was a managers
check. A managers check is
one drawn by a banks
manager, Tria in this case,
upon the bank itself. We have
held that it stands on the same
footing as a certified check,
which is deemed to have been
accepted by the bank that
certified it, as it is an order of
the bank to pay, drawn upon
itself, committing in effect its
total resources, integrity and
honor behind its issuance. By its
peculiar character and general
use in commerce, a managers
check is regarded
substantially to be as good
as the money it represents.
In fact, it is obvious from the
PNB affidavits that the MWSS
C/A was deducted upon the
issuance of the managers check
and not upon its encashment.
Indeed, as the banks own check,
a managers check becomes the
primary obligation of the bank
and is accepted in advance
by the act of its issuance
The felony of qualified theft
started with the use of the now
missing falsified letter-request

and supporting documents for

the issuance of the managers
check and the re-activation of
the MWSS C/A. It was the
pretense of an authority
from MWSS that deprived
PNB the liberty to either
withhold or freely give its
consent for the valid
reactivation of the account
and issuance of the check.
-Thus, the processing and
approval of the check are the
responsibility of Tria.
As such, Tria is duty-bound to
verify from the banks client any
supposed authority given for the
issuance of a managers check. He
was, therefore, duty-bound to
confirm with MWSS whether the
letter-authorization
for
the
deduction of P5.2 million from the
MWSS C/A is genuine, legal and
binding.
SC RULING: petition
is GRANTED. The Decision of
the Court of Appeals in CA-G.R.
SP No. 108571
is REVERSED and SET ASIDE.
The Office of the City Prosecutor
of Quezon City is ORDERED to
file an Information charging
Amelio C. Tria and Atty.

Reyes/John Doe for Qualified

Theft.